Crowdfunding is a very agile way to raise funds, but it is not a magic wand. Creating a project and publishing it on a platform doesn’t guarantee that the donations will roll in. It’s up to each organization to actively promote their project, and the most successful campaigns invariably involve a creative “ask” and an enthusiastic and hardworking campaign team who make effective use of several communication channels to encourage potential donors to give.
Nevertheless, when compared with other fundraising strategies, crowdfunding is very advantageous for the following reasons:
- Speed: You can normally set up your project in a few hours and run a successful campaign over a period of a few weeks. This is considerably faster than lengthy grant application processes or event planning.
- Ease of use for donors: Individuals can contribute to a crowdfunding campaign from all over the world at any time of day and, in the case of HIPGive, in both English and Spanish. It’s a great way to engage with international donors and their networks.
- Low cost: Most platforms charge a small fee, normally in the range of 5% - 15% of funds raised. You should also understand whether the platform is “goal based” (you only get the funds if you reach your goal) or “keep what you raise” (you receive all the funds, no matter how much or little.) HIPGive is the latter, and you can check out our fee structure here.
- Eligibility:There are crowdfunding platforms for all types of initiatives, so it’s up to you to find a good match for your project. HIPGive is unique in focusing on social impact projects serving Latino communities across the U.S. and Latin America. What’s more, any legally-registered nonprofit organization can participate.
- Innovation:Because of the ability to appeal directly to donors, crowdfunding is a great way to run new projects that are difficult to fund through traditional means. You also have the opportunity to be creative with marketing and communication strategies, with the knowledge that the low-cost and agile time frame reduces the cost of failure.
If you have a project that needs funding and are willing to coordinate a dynamic communications campaign involving your existing donors and with a view to reaching to new donors, then crowdfunding is for you. It probably won’t replace your major sources of income in the short term, but can be a great way to widen the funnel, reaching new audiences and encouraging new donors to get involved and existing donors to give in new ways.
If you feel ready, why not create your first project on HIPGive today!